General News
How Fintechs Are Disrupting the Nigerian Banking Industry
By Adeniyi Ogunfowoke
The Nigerian financial sector has significantly grown in leaps and bounds; thanks largely to technology. Currently, the services of banks have been automated. Customers are no longer required to visit their brick and mortar branches to perform any transaction.
With their smartphones, they can process local and international transactions. These are exciting times for the Nigerian banking sector as the long hours spent at the bank has been greatly reduced.
It has even gotten more interesting since the entry of fintechs (financial technology) into the banking game in Nigeria.
As a result of technology, fintech platforms such as Jumia Pay and others are disrupting the way banking business is done, that it now seems like the banks are playing catch-up.
Fintech, according to Investopedia “is used to describe new technologies that seek to improve and automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes and lives by utilising specialised software and algorithms that are used on computers and, increasingly, smartphones.”
Although Nigerian banks are exploring and exploiting fintechs to improve their services, they are not taking advantage of it as quickly as the private firms whose services are entirely online.
Key Services Offered by Fintechs
The edge that fintechs like Jumia Pay and others have over the banks are in the services they both offer. Many Nigerians and businesses are trooping to fintechs because of the flexibility of their services. This does not necessarily mean that they have abandoned the banks.
There are some key services that make fintechs stand out or unique. They include (1) eCommerce payment: online retailers can now seamlessly pay for their orders, thanks to the payment gateway service offered by fintechs. To make payment easy for its millions of customers, Jumia, Nigeria’s no 1 shopping destination launched Jumia Pay. This has enabled every Jumia customer to pay for transactions across the Jumia ecosystem (flight, hotels, food, production services among others. It is secure, flexible and offers seamless checkout experience. And you will even get 5% off for using Jumia Pay. (2) Loans: When it comes to loans, the fintechs are far ahead of banks. Without a collateral, you can apply for a loan and receive it within 24 and 48 hours. They also have a flexible payment plan. As an entrepreneur, you may need a loan to shore up your business, you can apply for Jumia loan and you can go and sleep because the repayment plan is the best in the Nigerian fintech world. (3.) They also provide mobile money transfer and Unstructured Supplementary Service Data Services.
Collaboration or Competition?
The no love lost relationship between Fintechs and Banks can seemingly be compared with that of traditional media and internet (social media).
Many of the traditional media in Nigeria have evolved and now have an online version of their publication as well as social media accounts. This has ensured that they remain relevant and they are not entirely overshadowed by the online news media.
In fact, some of them have moved their entire publication online. And it is working for them. Hence, they do not see social media or the internet has a competition. Rather, they see it as a tool to enhance their services.
This is exactly what banks need to do. There is no competition between fintechs and banks. Fintechs are only utilising the tech machinery available to them faster than the banks. There is nothing wrong with a bank owning payment gateway as long as they get CBN’s approval.
Even though they are already collaborating, it needs to be taken a notch higher. For example, the fintechs still need banks to keep all payments made using the payment gateway and of course banks will charge interest for keeping the money. Therefore, it is better for them to collaborate rather than compete.
Collaboration is also important in fighting the challenges facing the banking industry. The foremost challenge among others is fraud. The CBN recently reported that there were 20,768 reported cases of fraud and forgery (attempted and successful), valued at N19.77bn in the review period, compared with 16,762 cases, involving N5.52bn and $ 0.12m in the corresponding period of 2017. It is not gainsaying that fintechs are disrupting the Nigerian banking industry. Regardless they need to work together and collaborate to take the industry to the next level.
Nigeria’s Buy Now, Pay Later (BNPL) market is on a fast-growing trajectory and is predicted to be valued $2.61 billion by 2030, up 83% from $1.42 billion in 2024, owing primarily to the rapid emergence of fintechs in the country.
This observation was stated in EnterpriseNGR’s State of Enterprise 2025 report, which focuses on how fintechs are reshaping Nigeria’s business landscape through digital innovations, accessible credit systems, and mobile-first financial tools.
As a credit system, BNPL allows users to stagger payments for products and services, making it a key development driver in Nigeria’s developing digital economy.
From 2021 to 2024, the BNPL experienced a compounded annual growth rate of 23.1%. Fintechs have contributed to the rapid growth by providing a range of flexible loan alternatives for e-commerce, retail, and services, bridging financial gaps for millions of disadvantaged Nigerians.
The report highlights how fintechs have contributed to Nigeria’s flexibility and resiliency by simplifying digital payments, automating invoicing and payroll systems, and democratising credit through platforms such as Renmoney and FairMoney.
The report also shows a significant rise in remittance inflows into Nigeria following the Central Bank of Nigeria’s 2024 policy adjustments.
According to the report, by 2024, Nigeria boasted over 400 licensed digital lenders who extend collateral-free credit to those commonly excluded by banks.
The Nigeria Immigration Service (NIS) strengthened bilateral relations with the Netherlands’ government through an agreement targeted at improving migration governance and border security.
This partnership was confirmed during a meeting at the NIS headquarters in Abuja, which was attended by a Dutch team led by Jurgen Bartelink, Chargé D’Affaires of the Embassy of the Netherlands in Nigeria.
The meeting focused on increasing bilateral migration cooperation and came after the comptroller general of Immigration, Kemi Nandap, paid a working visit to the Netherlands.
Under the agreement, the Dutch government pledged to continue supporting technology-driven solutions targeted at boosting Nigeria’s border control systems and improving migration management.
During the Netherlands Embassy diplomats handed over essential operational tools, such as Edison Software licence keys and the Passport Examination Programme Manual App.
According to NIS spokeswoman ACI Akinsola Akinlabi, “The partnership focuses on enhancing bilateral collaboration on migration management and reviewing ongoing capacity-building efforts.”
Bartelink, Chargé d’Affaires of the Netherlands Embassy in Nigeria, underlined the Netherlands’ commitment to helping Nigeria’s continuing border security and migration reforms.
Also speaking, Rob Bokhoven, head of international affairs, repatriation, and deportation services at the Dutch Ministry of Justice and Security, emphasised the country’s strong bilateral relations and announced plans to share a mobile border software solution with the NIS.
Receiving the equipment, Nandap said the delivery of the gadgets would boost West African country’s border security, significantly improve the service’s document verification border management capabilities and support the implementation of Nigeria’s National Migration Policy.
“The engagement will further reinforce the strategic partnership between Nigeria and the Netherlands advancing shared goals in migration governance, border security and international cooperation,” she added.
Peter Enogb, principal country economist, African Development Bank (AfDB), says the rise in global uncertainty, emanating from increases in global trade tariffs, has slowed Nigeria’s projected growth to 3.2% in 2025.
“Without this level of heightened uncertainty, our projections would probably have been somewhat higher. We’ve reduced our projections for Nigeria. We initially were projecting 3.5% – 3.6% growth in 2025.
“But given the current situation, our models are showing that we’re taking a more cautious approach. So that’s why we produced this and, of course, the main driver is uncertainty in the global economy,” Enogb said.
He said this at the launch of the 2025 Nigeria Country Focus Report (CFR) on Thursday.
AFDB projected that real GDP growth would hit 3.1% in 2026. Following the 2024 consumer price index (CPI) rebasing, with lower weights for food items, the inflation rate is expected to reduce over the medium term to 24.7% in 2025 and 17.3% in 2026.
As imports start to rise over the medium term, the current account is projected to decline to 3.9% of GDP in 2026.
The National Bureau of Statistics (NBS) reported that Nigeria’s headline inflation slowed for the second consecutive month to 22.97% in May. This is down from 24.48% at the start of the year
This is contrary to the World Bank projection that Nigeria’s economy would record steady growth of 3.6% despite the shift in the global trade dynamics.
Joseph Ogebe, head of research and development at Nigerian Economic Summit Group (NESG), also said that global uncertainty had been very high in recent times, resulting from the Trump 2.0 effect.
“And also with the recent war between Israel and the international community, we’ve seen what’s happening to oil prices. Even with the call-off of the war, we’ve seen the effect on oil prices too, which has implications on the fiscal side. So it has implications for the general economy,” he said.
The head of research at NESG said that rather than focusing on just growth, what should be looked at is a strategy called growth with depth.
“Growth with depth means that your growth must be diversified, export-led, productive, and technologically driven,” he said.
Ogebe said that if the Government works towards adopting a strategy of growth with depth, there is a tendency for the government to move towards its goal of achieving a $1 trillion economy by 2030.
The report revealed that the country’s recent policy moves, including fuel subsidy removal, exchange rate unification, and tax reforms, reflect a commitment to long-term transformation.
However, it also pointed out that at about 13%, Nigeria’s tax-to-GDP ratio is among the lowest in West Africa, noting that fiscal reforms are urgent.
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